9911796707
TMI Blog2023 (9) TMI 1373X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,97,57,985/- as differential central excise duty from the appellant for the period 2011-12 to April, 2015. Of this amount, Rs. 1,96,92,460/- was confirmed for the period 2011-12 up to November 2013 under Rule 11 of the Central Excise Valuation Rules, 1944 [Rules ] read with rule 4 and rule 9 and Rs. 65,524/- was confirmed for the period December 2013 to April, 2015 under proviso to rule 9 read with rule 8 of the Valuation Rules. The reason for this differential treatment is that the Valuation Rules were amended from December, 2013. 2. The appellant is a manufacturer of TMT bars of various grades and it sold them to independent buyers as well as to two its inter-connected undertakings, namely, M/s Jindal Steel Power Ltd. [JSPL] And M/s Ji ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 11 of the Valuation Rules read with rule 4 and rule 2 (b), i.e., these goods should have been valued at the value at which the greatest aggregate quantity of goods were sold by the appellant to the independent customers. For the subsequent period i.e., December, 2013 onwards, according to the Revenue, the value should be determined as per rule 9 at 110% of the cost of production. 6. On behalf of the appellant learned counsel made the following submissions. (i) The appellant and JSPL and JPL are inter-connected undertakings and are, therefore, related persons of the appellant in terms of clause (i) of section 4 (3)(b) of the Act. (ii) Therefore, rule 10 is applicable to the present facts and not rule 11 which can be applied only if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgeable on the basis of value and such value shall be, as per Section 4, the "transaction value" for each removal of the goods if four conditions are met: (a) there is a sale; (b) the sale is for delivery is at the time and place of removal; (c) the assessee and the buyer of the goods are not related; and (d) the price is the sole consideration of sale. 10. If any one or more of the above conditions is/ are not met, the value shall be determined as per the Central Excise Valuation Rules, 2000. Of the four conditions for accepting the transaction value as the assessable value to determine excise duty, the one relevant to this case is that 'the buyer and seller are not related'. It is undisputed that the appellant and two of its buye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so associated that they have interest, directly or indirectly, in the business of each other. 14. If they are related persons, value should be determined as per the Valuation Rules. Of these: (a) Rules 1 and 2 are the preliminary provisions. (b) Rule 3 mandates that valuation should be done as per the rules. (c) Rule 4 deals with situations where goods are sold but not at the time of removal. (d) Rule 5 deals with situations where goods are sold, but not at the place of removal. (e) Rule 6 deals with situations where there is an additional consideration for sale. (f) Rule 7 deals with situations where there is no sale and the goods are transferred to the assessees owned depot not at the premises of the consignment agent. (g) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JPL were related persons only because they were interconnected undertakings and they were not also related in any of the other three ways [clauses (i) (ii) or (iv) of clause (b) of sub-section (iii) of Section 4] or the appellant and JSPL or JPL are the holding or subsidiary companies of each other, then valuation should be done as if they are not related persons. 17. In this case, there is no allegation or evidence that JSPL and JPL are connected to the appellant in any of the other three ways. There is no allegation that the appellant is either the holding or the subsidiary company of either JSPL or JPL. The only allegation is that they are associated companies and hence they are interconnected undertakings. It has also been alleged tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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